Danier Leather profits improve despite weaker holiday sales period

TORONTO - Danier Leather Inc. (TSX:DL) reported Wednesday that its second-quarter 2012 profits were higher than a year ago even as sales slid in the crucial holiday period.

The Toronto-based retailer, which has 91 stores across Canada, reported a four per cent increase in net earnings at $8.5 million or $1.77 per share, up from $8.2 million or $1.67 per share in the year-earlier period.

Revenue for the three months ended Dec. 24 dropped to $ 59.5 million from $ 61.4 million.

The company says it has placed more emphasis on generating sales from accessories, like belts, briefcases and wallets, as unseasonably warm weather has led to a reduction in outerwear sales.

Accessory sales were up by eight per cent, but overall sales —including leather wear like coats, pants, skirts and vests — was down three per cent.

In addition to the unusually warm weather, retailers had to contend with shoppers on tight budgets this past holiday season as many focused on paying down debt amid an uncertain economic picture.

Comparable store sales —a key measure of growth used in the retail industry — slipped three per cent during the quarter.

The profit was helped by a 12 per cent decrease in expenses during the quarter to $21.4 million.